Oil & Gas News

UNOC Seeks Partner, After Uganda Awards New Oil Exploration Licenses

Proscovia Nabbanja, UNOC CEO

The Ministry of Energy and Mineral Development (MEMD) is to sign production sharing agreements (PSAs) and grant exploration licences – for an initial two-year period – with the Uganda National Oil Company (UNOC) and DGR Energy Turaco Uganda Limited, according to a recent Uganda cabinet resolution.

UNOC has been awarded the 1,285sqkm Kasuruban block, covering the districts of Buliisa, Hoima and Masindi while DGR Energy which is owned by Australia’s DGR Global, was handed the 637sqkm Turaco block that is found in Ntoroko district, as the second oil and gas licensing round for the exploration of five blocks in the Albertine Graben continues to take shape.

“UNOC will find suitable joint venture partner(s) within the first exploration period,” the government resolution also reads in part.

For UNOC, which represents Uganda’s commercial interests in the sector, this development is in line with the company’s ambitions of eventually attaining the required capacity to become an operator.

However, being short on funding and technical expertise, it will need a suitable partner to carry its investment – a similar financing model to the one it already has in the Tilenga, Kingfisher and EACOP projects.

This financing model is hard to execute during exploration though because of the uncertainty and risk of the phase in an oil project. Not many venture companies are willing to carry a partner’s investment unless they are sure of the oil finds.

Peter Muliisa, UNOC’s chief legal and corporate affairs officer, told the New Vision newspaper that the company had already received various requests to partner with it, but an “experienced partner” will only be selected after a bid is called through a structured acquisition process.

UNOC, he also noted had over time built capacity with a skilled and qualified workforce that had readied it for the exploration period.

Some of these workers were instrumental in previous exploration work in the Albertine region, Angella Ambaho, a communications officer with the company added.


For the 2022 – 2023 financial year, the government intends to secure $418.78 million as part of its equity financing for the different petroleum projects it has a stake in including the East African Crude Oil Pipeline (EACOP), the oil refinery and the Kampala and Jinja storage terminals, among others.

Because UNOC handles the country’s commercial interests in all the petroleum projects, the government is mandated to avail the money the company needs to carry out its work.

As regards its stake in EACOP for instance, government’s capitalisation strategy for UNOC shows that over a period of five years, the company will receive about $350 million.

Uganda is, however, currently grappling with a huge debt burden, which has forced it to postpone many of its financial obligations in other sectors.

UNOC’s partner in its exploration activities will therefore be expected to help undertake the more capital-intensive aspects of the process.

UNOC’s Nabbanja (C) visiting CNOOC’s Kingfisher project last year

Government’s capitalisation of UNOC will wind up two years after First Oil (projected for 2025), at which point the company is expected to finance its activities.

More Blocks

The other available blocks under the second licensing round – that was launched in 2019 – are Avivi found in Obongi, Adjumani, Arua and Amuru districts with an area coverage of 1026sqkm, the Omuka block located in Nebbi, Nwoya and Buliisa districts (750sqkm) plus Ngaji found in Kanungu, Rukungiri and Rubirizi districts (1230sqkm).

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Deep Earth
Deep Earth International critically examines developments in the extractive and energy sectors in Uganda and the wider East African region. Drawing from the vast experience of its founders who have each covered and written about these sectors for at least fifteen years, this website is the go-to platform for anyone seeking to get a better understanding of the same.

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